THQ Partners With Cloud-Computing Provider Joyent, Upping Investment In Social Games

Videogames publisher THQ said on Monday it had chosen Joyent to provide cloud-computing service to THQ's social gaming development teams. Competitors have been making big bets on social gaming as Facebook games like Farmville have attracted many players, and THQ's announcement is part of the company's own push into social games.

THQ, the publisher of such games as the Red Faction series and World Wrestling Entertainment titles, will use Joyent's service to allow its social game developers to focus on creating the games.
As a cloud computing service, Joyent manages things like server infrastructure and bandwidth needs for its customers. Its customers include social game developers Kabam!, Backstage Technologies and Country Life, as well as LinkedIn.

THQ says that its social game developers will be able to create games faster at lower cost, allowing for more experimentation.

"We've been working on a couple of Facebook games," says Mike Hogan, vice president of online publishing and operations for THQ, "Joyent will allow our game developers to bring social games to market quickly and they won't have to worry about the infrastructure."

Hogan says that besides the games it is currently working on, the company and its developers will release a number of social games in the coming year.

"We're not making one-offs," he says, stressing the long-term view the company has of this part of the industry. "We've got some great brands with us, and when you take a look at expanding that to the social platform, it's possible that some of these could be big hits."

Hogan thinks social games can both help THQ expand its consumer base as well as potentially provide new sources of revenue, through in-game sales of virtual goods, for instance. They are also cheaper to develop, as triple-A titles (such as Microsoft's recent Halo: Reach) can cost as much as or more to make than Hollywood blockbusters.

Joyent's service will also support THQ's other online games like Company of Heroes Online.

The company has been taking steps to become more 'social'. In July, the company partnered with microtransactions platform Live Gamer, to facilitate sales of virtual goods in its online games and upcoming Facebook games. The importance of succeeding in this new area for THQ is underscored by its lackluster recent market performance, its stock dropping more than 50% over the past half year. And a delay to the release of its anticipated new Red Faction Armageddon title to May 2011 caused the company to lower its fiscal 2011 guidance from net sales of $845 million to $865 million down to $800 million to $825 million.

Other competitors among major videogame publishers have also caught Facebook fever and are making big moves in social games as well. Last year, Electronic Arts purchased one of Facebook's top game developers, Playfish.